Morning report: Wheat jumps up thanks to a weaker dollar and poor U.S. crop conditions. (Comments are updated by 7:30 a.m. Central Time.)
Corn mixed
Soybeans up 4-10 cents; Soymeal up $2.90/ton; Soyoil down $1.19/lb
Chicago wheat up 8-10 cents; Kansas City wheat up 1-4 cents; Minneapolis wheat up 3-4 cents
*Prices as of 6:55am CDT.
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Corn
Corn prices were mixed this morning though the nearby contract (May22) rose $0.02/bushel to $8.18/bushel to set a new 10-year high this morning as planting delays, Black Sea supply concerns, and dry weather in Brazil continue to prop up prices.
Deferred month contracts traded $0.01/bushel lower.
“While geopolitics and climate risk are intertwined, nervousness remains on the grain market,” ag consultancy Agritel told Reuters this morning.
A shipment of Ukrainian corn shipped out of Constanta, Romania yesterday – the first time in the two months since Russia invaded Ukraine that Ukraine has been able to successfully bring its agricultural products to the world market.
“This is the first panamax vessel with Ukrainian corn to leave the port,” Comvex President Viorel Panait told Reuters. “Supporting Ukrainian grain exports means preventing a colossal wave of global hunger triggered by the blocking of Ukrainian ports.”
Ukraine continues to be the world’s fourth largest exporter of corn, despite downward export forecast revisions made in the aftermath of Russia’s unprovoked military occupation of Ukraine. This shipment suggests that alternative shipping routes that Ukrainians have been forced to pursue in the wake of Black Sea port closures are providing a way for Ukrainian corn to be shipped to global customers.
“Compared with the initial moment, when everyone was searching for alternatives, transport corridors for these exports are slowly taking shape,” Panait said, noting that it is not a perfect solution. “The infrastructure around the port is a problem for all economic activity in Romania … slow access generates additional costs in these industries.”
Yesterday, Ukraine made allegations that Russian troops are stealing grain from southern Ukrainian grain farms and commercial storage facilities. The Ukrainian Foreign Ministry said it “strongly condemns the criminal actions of the Russian Federation in the so-called expropriation of crops from farmers in the Kherson region.”
“The looting of grain from the Kherson region, as well as the blocking of shipments from Ukrainian ports and the mining of shipping lanes, threaten the world’s food security,” the statement continued. “We demand that Russia stop the illegal theft of grain, unblock Ukrainian ports, restore freedom of navigation and allow the passage of merchant ships.”
Global buyers looking to purchase Russian wheat continue to face obstacles as sanctions make transacting trades with Russia more difficult and costly. To me, this is a significant development as it further complicates global grain trade flows.
“Through its illegal actions, Russia is robbing not only Ukraine but also consumers abroad. The United Nations estimates that about 1.7 billion people may face poverty and hunger due to food disruptions as a result of a full-scale war waged by Russia against Ukraine,” the Ukrainian Foreign Ministry said.
Soybeans
Soybean prices edged $0.05-$0.10/bushel higher this morning on cool and wet weather forecasts expected to continue in the U.S. over the next week.
Continued strength from Indonesia’s palm oil ban also supported the soy complex this morning. Profit-takers had swooped into the soyoil market overnight after yesterday’s soyoil rally resulted in the most active contract setting a new price high of $87.65/lb.
Chinese sow numbers fell 3.3% on the month at the end of March 2022 to nearly 41.9 million head. That value is also 3.1% lower than March 2021 Chinese sow volumes. China’s total hog population fell nearly 6% lower than year-ago values at the end of March to 422.53 million head as profit margins for hog production remains negative.
But pork prices have been on the upswing in China, suggesting that this contraction may be short-lived. That’s good news for soybean exporters like the U.S. and Brazil because it could result in China purchasing more soybean supplies in the 2022/23 marketing year relative to the current one.
Wheat
Wheat prices edged $0.01-$0.010/bushel higher this morning as declining U.S. crop conditions and supply disruptions in the Black Sea continue to keep a stranglehold on higher prices. A lower dollar also helped the cause for U.S. wheat.
“There is no reason for wheat prices to decline,” a senior executive with an international trading company told Reuters overnight. “We are seeing supply constraints as well as strong demand.”
The European Commission revised its 2022/23 soft wheat production estimates for France and Sweden overnight, dropping 44 million bushes (1%) from its previous estimate to lower its forecast to 4.78 billion bushels.
The lower production value will keep global wheat stocks tight, as the E.U. is expected to maintain its forecast of 1.47 billion bushels in exports for the 2022/23 marketing year. If realized, that would be a new record high export loading volume for E.U. wheat shipments.
This year, the E.U. is on pace to be the largest exporter of wheat in the world, though Russia typically claims the top spot.
Weather
More showers and thunderstorms are expected in the Upper Plains and Midwest today, according to NOAA’s short-range forecasts. Parts of western North Dakota, South Dakota, and Nebraska could see a chance of snow today.
It will likely be a windy day in the Southern Plains where severe thunderstorms are also expected. The northern half of the Plains could see up to two inches of precipitation accumulation today while the Mississippi River Valley will likely max out at an inch of accumulation.
Financials
Unfavorable quarterly earnings results for tech companies, including Apple and Amazon, weighed heavily on U.S. stock markets this morning, dragging the S&P 500 42.25 points (0.99%) lower to $4,241.25. Fear of rising interest rates also contributed to the morning’s losses.
China announced overnight it would enact a stimulus policy to offset economic slowdowns from China’s recent COVID lockdown. Chinese Foreign Ministry spokesman Zhao Lijian also spoke favorably overnight of China’s relationship with Russia, calling it a “new model” for the rest of the world.
This may have been the most significant piece of market news to my mind this morning. China has previously tried to distance itself from Russia following Russia’s unprovoked military invasion into Ukraine.
But as Russia enters into a new phase of the war, the support from China could have serious ramifications for global partnerships and diplomatic efforts. All of which could ultimately alter potential grain trades in the coming years.
Also worth a read on our website, FarmFutures.com:
Will the cattle market setback continue? Naomi Blohm points out that favorable deferred futures contract pricing suggests that higher prices are on the way.
Bill Biedermann breaks down the odds of record corn yields this year as the planting window begins to narrow.
My first Feedback from the Field column of the season! Spoiler alert – little to no planting progress has been made in the Corn Belt and winter wheat is looking rough.
Bryce Knorr points out that rising interest rates could slow potential expansion plans for U.S. farmers.
Executive editor Mike Wilson explores the economic benefits of microbials to help offset the pain of surging nitrogen fertilizer costs.
Advance Trading’s Larry Shonkwiler envisions high price volatility for corn in the last third of the 2021/22 marketing year, especially as export prospects remain uncertain.
Senior editor Ben Potter digs into the latest NOAA forecasts for spring planting prospects.
Morning Ag Commodity Prices – 4/29/2022
Contract
Units
High
Low
Last
Net Change
% Change
MAY ’22 CORN
$ / BSH
8.2125
8.14
8.18
0.02
0.25%
JUL ’22 CORN
$ / BSH
8.1775
8.095
8.135
0
0.00%
SEP ’22 CORN
$ / BSH
7.735
7.6575
7.6925
-0.005
-0.06%
DEC ’22 CORN
$ / BSH
7.5575
7.485
7.5075
-0.01
-0.13%
MAR ’23 CORN
$ / BSH
7.58
7.5125
7.54
-0.005
-0.07%
MAY ’23 CORN
$ / BSH
7.5775
7.525
7.5525
-0.0025
-0.03%
JUL ’23 CORN
$ / BSH
7.5575
7.49
7.52
0
0.00%
MAY ’22 SOYBEANS
$ / BSH
17.275
17.07
17.135
0.07
0.41%
JUL ’22 SOYBEANS
$ / BSH
17.035
16.7925
16.91
0.0625
0.37%
AUG ’22 SOYBEANS
$ / BSH
16.505
16.28
16.395
0.0625
0.38%
SEP ’22 SOYBEANS
$ / BSH
15.77
15.555
15.675
0.08
0.51%
NOV ’22 SOYBEANS
$ / BSH
15.4025
15.17
15.26
0.05
0.33%
JAN ’23 SOYBEANS
$ / BSH
15.415
15.1775
15.28
0.065
0.43%
MAR ’23 SOYBEANS
$ / BSH
15.2975
15.02
15.12
0.075
0.50%
MAY ’23 SOYBEANS
$ / BSH
15.2825
15
15.1225
0.095
0.63%
JUL ’23 SOYBEANS
$ / BSH
15.275
15.025
15.1375
0.1
0.67%
MAY ’22 SOYBEAN OIL
$ / LB
91.4
89.85
89.85
-0.75
-0.83%
JUL ’22 SOYBEAN OIL
$ / LB
87.65
85.69
85.71
-0.89
-1.03%
MAY ’22 SOY MEAL
$ / TON
443.4
439.7
443.1
2.9
0.66%
JUL ’22 SOY MEAL
$ / TON
435.7
430.1
434.4
4.3
1.00%
AUG ’22 SOY MEAL
$ / TON
428.1
423
427.1
4.5
1.06%
SEP ’22 SOY MEAL
$ / TON
418.4
414.1
418.3
4.7
1.14%
OCT ’22 SOY MEAL
$ / TON
411.1
405.8
410
5
1.23%
MAY ’22 Chicago SRW
$ / BSH
10.85
10.7125
10.835
0.095
0.88%
JUL ’22 Chicago SRW
$ / BSH
11.025
10.7825
10.9375
0.08
0.74%
SEP ’22 Chicago SRW
$ / BSH
11.015
10.7775
10.93
0.0825
0.76%
DEC ’22 Chicago SRW
$ / BSH
10.995
10.765
10.9125
0.08
0.74%
MAR ’23 Chicago SRW
$ / BSH
10.9725
10.7575
10.9075
0.085
0.79%
MAY ’22 Kansas City HRW
$ / BSH
11.405
11.3475
11.405
0.0425
0.37%
JUL ’22 Kansas City HRW
$ / BSH
11.5275
11.36
11.4325
0.02
0.18%
SEP ’22 Kansas City HRW
$ / BSH
11.54
11.38
11.4575
0.03
0.26%
DEC ’22 Kansas City HRW
$ / BSH
11.5275
11.38
11.465
0.035
0.31%
MAR ’23 Kansas City HRW
$ / BSH
11.42
11.4125
11.415
0.0325
0.29%
MAY ’22 MLPS Spring Wheat
$ / BSH
0
#N/A
11.905
0
0.00%
JUL ’22 MLPS Spring Wheat
$ / BSH
12.0275
11.8575
11.955
0.04
0.34%
SEP ’22 MLPS Spring Wheat
$ / BSH
11.895
11.73
11.8
0.025
0.21%
DEC ’22 MLPS Spring Wheat
$ / BSH
11.835
11.7025
11.7725
0.025
0.21%
MAR ’23 MLPS Spring Wheat
$ / BSH
11.68
11.68
11.68
-0.0175
-0.15%
JUN ’21 ICE Dollar Index
$
103.685
102.81
103.08
-0.579
-0.56%
JU ’21 Light Crude
$ / BBL
106.87
104.54
106.39
1.03
0.98%
JU ’21 Light Crude
$ / BBL
104.95
102.68
104.52
1.05
1.01%
MAY ’22 ULS Diesel
$ /U GAL
4.96
4.9283
4.96
-0.1754
-3.42%
JUN ’22 ULS Diesel
$ /U GAL
4.0806
3.9936
4.0663
0.0579
1.44%
MAY ’22 Gasoline
$ /U GAL
3.5225
3.4676
3.5125
0.0091
0.26%
JUN ’22 Gasoline
$ /U GAL
3.5015
3.4254
3.4847
0.0088
0.25%
MAY ’22 Feeder Cattle
$ / CWT
0
#N/A
157.95
0
0.00%
AUG ’22 Feeder Cattle
$ / CWT
0
#N/A
170.4
0
0.00%
AP ’21 Live Cattle
$ / CWT
0
#N/A
138.5
0
0.00%
JU ’21 Live Cattle
$ / CWT
0
#N/A
133.9
0
0.00%
MAY ’22 Live Hogs
$ / CWT
0
#N/A
103.975
0
0.00%
JUN ’22 Live Hogs
$ / CWT
0
#N/A
110.975
0
0.00%
APR ’22 Class III Milk
$ / CWT
24.38
24.38
24.38
-0.01
-0.04%
MAY ’22 Class III Milk
$ / CWT
24.59
24.59
24.59
-0.01
-0.04%
JUN ’22 Class III Milk
$ / CWT
24.55
24.55
24.55
-0.07
-0.28%
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